Can a AD charge thousands more for a sought-after Rolex model?

[antbkny]

Originally Posted by JR16

Pretty sure in US an AD would be at jeopardy of losing its account if they sold above retail. With that said, I agree w others that I’d be happier if for all pieces the price you see is the price you get- no premiums and no discounts. Of course the history of deeply discounted unpopular models at grays have messed this up. Instead it would have been better if an AD was incentivized / allowed by Rolex to sell a slow mover at a big discount or sell back to Rolex , AND would have been better if Rolex just didn’t make an oversupply of datejusts and other pieces that didn’t sell well at ADs. This is clearly a problem created in large part by Rolex and its retailers and a problem only they can fix.


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good points. I think if and when inventory starts rolling in with abundance, things should stabilize.

[Andad]

Originally Posted by brandrea

So how did we get into this mess in the first place?

Why isn’t the price just the the price as set by Rolex. No discount, no sell for over list.

Originally Posted by tyler1980

exactly. Discounts created the market and the conditions for the secondary dealers to thrive. The over retail stuff is new (relatively) and its a small part of the volume secondary dealers are selling.

If a regular customer could get 10% off then a volume purchaser could get 20% from an AD. So when someone else can always get a better discount then no one uses AD's.

I see a serious error in your post T.

A grey could never make a worthwhile sale if they bought at 10% less than I could buy for.
Think about it, the grey would have to offer me a better price than the AD and there is nothing there.

[AK797]

Originally Posted by brandrea

Agreed

Discounts were always the norm until recently so perhaps in time, this will sort itself out.

Only something that collapses global demand will do this and that will be bad for everyone. I can't really see it, the stockmarket and other markets are rising and high-ish but backed by good earnings and low unemployment etc so economic conditions are pretty good, so I see a downturn coming not a 2008 style crash and recession.

In the watch market as well as flippers from nowhere I also see a lot of buyers are moving from other brands to the strong resale ones like Rolex and PP, and so I think after any adjustment they won't go back to those brands and in effect those brands will really struggle in future, as customers will stay with the safer brands, which will help preserve their future.

[AK797]

If I was an AD I would bundle with DJs and OPs and Exps etc, as this gets you more sales and avoids any backlash from Rolex.

[beshannon]

Originally Posted by JR16

Pretty sure in US an AD would be at jeopardy of losing its account if they sold above retail.

Why?

[AK797]

Originally Posted by beshannon

Why?

It's now a control thing and Rolex will not allow ADs to set different prices in different areas and become a competing mini-market themselves, esp when now they don't even want greys setting prices and are working hard to starve them of product and in the UK it is working. Rolex want total control over every aspect of the brand and now that includes who buys them, something we've never seen before.

[beshannon]

Originally Posted by AK797

It's now a control thing and Rolex will not allow ADs to set different prices in different areas and become a competing mini-market themselves, esp when now they don't even want greys setting prices and are working hard to starve them of product and in the UK it is working. Rolex want total control over every aspect of the brand and now that includes who buys them, something we've never seen before.

Interesting, however, I ask again, why?

If the prices are suggested as their website clearly states, then how is this a problem?

[77T]

“Can” & “Should” are two different matters.

“Can”
Here in US they can because of antitrust protections. It had been a common practice in scarce items. Car dealers do it as well as other retailers that are not owned by the manufacturer. There are exceptions in certain areas of trade where price gouging is forbidden by statute. Gas shortage price gouging (or other commodities) is considered exploitative and unethical - many States have laws on this but it never seems to stop the greedy behavior some retailers exhibit.

An Apple store doesn’t charge more than retail; Apple owns the store and their policies forbid it. However, a Best Buy store could if it wanted. Conversely, at times, Costco will discount Apple products. These are the hallmarks of a marketplace free of trade restraints.

“Should”
Retailers who choose to overcap a price for high demand items show a high disregard for their customers. They are not building loyalty nor representing the values of the brand(s) they represent as an independent retailer.

And some pricing reeks of antitrust behavior. For example, petroleum wholesalers tend to raise gas prices just before peak travel season. Sometimes by 10-20% or more. We are seeing that today ahead of our Memorial Day weekend. All retailers are padding that rising cost as well - perhaps only a few cents more for them - but taking advantage of a shortage while staying slightly to the right side of gouging.

An AD who artificially raises the price of Rolexes in high demand is one who ought to be called out in our WatchOut section. They are functioning as poorly as a scammer IMHO. While it might be legal here, it is reprehensible - and is considered exploitative and unethical.

Name & Shame IMHO

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[AK797]

Originally Posted by beshannon

Interesting, however, I ask again, why?

If the prices are suggested as their website clearly states, then how is this a problem?

It's not really suggested that's just old school terminology, ADs in the UK and US know it is an unofficial dictat, altho more official in the UK now and with a lot of yelling too, and that's why we haven't seen ADs selling the Daytona over retail for the last few years when they easily could have.

[tyler1980]

Originally Posted by directioneng

I see a serious error in your post T.

A grey could never make a worthwhile sale if they bought at 10% less than I could buy for.
Think about it, the grey would have to offer me a better price than the AD and there is nothing there.

my point was volume purchasers get better AD discounts than regular customers so the numbers are not really important. What is important is that grey dealers offer lower prices and they are an attractive alternative for buyers. Its the discount that has let the grey market flourish. I have no idea what discounts they get only that its more than we get, otherwise yes, the model doesnt work.

[AK797]

Originally Posted by tyler1980

technically i suppose they can however there is a stigma when an AD sells above the manufacturers "suggested" price, yet selling below it is expected in most other situations. No one is complaining about discounts.

IMO either the price is fixed or it isnt. Lets not cherry pick what situations pricing should be flexible.

Many ADs I talked to said even before Rolex only wanted 10% discounts on SS models to individuals so there was a limit, and now ofc there should be no discounts given at all so we are seeing more and more rules on pricing both up and down.

[TimeToWatch]

According to the FTC, MSRP is established and enforced by the manufacturer. Disobeying these guidelines can lead to you being cut off.

“If a manufacturer, on its own, adopts a policy regarding a desired level of prices, the law allows the manufacturer to deal only with retailers who agree to that policy. A manufacturer also may stop dealing with a retailer that does not follow its resale price policy. That is, a manufacturer can implement a dealer policy on a "take it or leave it" basis.”

https://www.ftc.gov/tips-advice/comp...cturer-imposed

[Andad]

Originally Posted by tyler1980

my point was volume purchasers get better AD discounts than regular customers so the numbers are not really important. What is important is that grey dealers offer lower prices and they are an attractive alternative for buyers. Its the discount that has let the grey market flourish. I have no idea what discounts they get only that its more than we get, otherwise yes, the model doesnt work.

Can a grey become a volume purchaser from a Rolex AD?

Surely Rolex would see these transactions jumping out if the records.

[Devildog]

Originally Posted by beshannon

Interesting, however, I ask again, why?

If the prices are suggested as their website clearly states, then how is this a problem?

Read my posts above Brian. ADs pricing will be set by Rolex.

Edit - was in my AD today. Was told that there are now further restrictions on discounting (from Rolex)

[Devildog]

Originally Posted by AK797

It's now a control thing and Rolex will not allow ADs to set different prices in different areas and become a competing mini-market themselves, esp when now they don't even want greys setting prices and are working hard to starve them of product and in the UK it is working. Rolex want total control over every aspect of the brand and now that includes who buys them, something we've never seen before.

Rolex has always dictated pricing to ADs (in the UK at least) Neil. Its not just become a form of control recently. It is sound business practice within retail.

[Art 1]

Originally Posted by directioneng

Can a grey become a volume purchaser from a Rolex AD?

Surely Rolex would see these transactions jumping out if the records.

Yes they can, in the past. Not sure about now.

[AK797]

Originally Posted by Devildog

Rolex has always dictated pricing to ADs (in the UK at least) Neil. Its not just become a form of control recently. It is sound business practice within retail.

For sure. But not in other countries which is why there was some doubt as to whether it was policy or just commonly agreed practice, but looks like many Asian countries are also falling into line now so it is pretty much global policy now.

[05carbondrz]

It’s pretty obvious to me that AD’s can do whatever the hell they want at this point and People will still buy.

[ap1]

They bundle now. Amazing what pops out of the safe when you offer to buy PM
Or multiple DJs

[Wcdhtwn]

Originally Posted by Bro Watch

If a authorized dealer has a desired Rolex piece that is brand new can he sell it for current gray market pricing? I would think he would be in danger of losing his Rolex account. What do you think?

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The problems is less that he's asking a premium and more that someone might pay it. Then his behavior is rewarded and it will continue, perhaps get worse.

I had an AD call me with a black dial D500 asking several thousand over retail. What he did, and maybe your AD did too, is buy the watch for himself and then try to flip it at gray market prices. I told him no thanks.

[79280_116520]

The meaning of MSRP = Manufacture SUGGESTED Retail Price. Wording is "suggested", that tells you all.